Your portfolios in brief
This week, we've decided to talk to you about QSR (Restaurant Brand International), which owns the Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS) restaurant chains. Restaurant Brands International is one of the world's largest owners of fast-food chains, with over 28,000 locations in more than 100 countries.
The company announced the appointment of former Domino's Pizza (DPZ) CEO Patrick Doyle as Executive Chairman. During his eight years with Domino's, Domino's Pizza shares recorded gains of 2.135%.
Restaurant Brand International reported good results for the last quarter, and its shares have accumulated gains of 22% since the beginning of the year.
"Improving quarterly results, combined with a change of guard at management level could bring a breath of fresh air to the group. Its price-earnings ratio stands at 24.50, with a dividend yield of 3.26%. Its ever-evolving business model makes it more resilient in a recessionary environment. Indeed, during the COVID crisis, the company was able to metamorphose and maintain good profitability despite the restrictions, demonstrating the company's flexibility to adapt," believes our President and Portfolio Manager Philippe Pratte.
Markets in brief
It was a rather quiet week for the markets, with trading volume on the decline as the stock market was closed for Thanksgiving on Thursday and only open until 1 p.m. on Friday. Indices got off to a good start this week, still buoyed by good results from companies such as Best Buy, which announced solid quarterly results and ended Tuesday's session up 12.78%.
History shows that Action Week in the U.S. is usually positive for the markets, and has been since 1945. Despite high inflation, the Fed's aggressive rate hike and fears of recession, investors are expecting a rise in consumer spending, which should offer stocks some gains. According to Bespoke Investment Group, the S&P 500 recorded an average gain of 60 basis points during Thanksgiving week.
Moreover, inflation fears have eased in recent sessions, allowing investors to be optimistic. The Fed's minutes on Wednesday offered markets a breath of fresh optimism, as the majority of members stated that a slowdown in rate hikes was on the cards.
"A substantial majority of participants felt that a slower pace of increase would likely soon be appropriate," the Fed minutes state. "The uncertain lags and magnitude associated with the effects of monetary policy actions on economic activity and inflation were among the reasons given for the importance of such an assessment."
Analysts are now expecting a 50 basis point hike at the next meeting, rather than the anticipated 75 points. The three main indices ended Wednesday's session higher, still in a context of bearish trading on the eve of Thanksgiving.
"This week, the Fed minutes were the major event, published mid-session on Wednesday. There were very few economic statistics published this week, and no major news, so all in all, it was a quiet week for the markets," adds Philippe Pratte.
Here are the weekly averages for the three main U.S. indices at the close of business at 1 p.m. on Friday.
And here's the average for the week for the TSX in Canada.
Pratte Portfolio Management is a firm registered with the Autorité des marchés financiers (AMF) and the Ontario Securities Commission (OSC).
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